Over $50 bln lost to software piracy: report

May 11, 2010 by Martin Abbugao

A shopper looks at counterfeit computer programmes in Dhaka, May 2009. Software piracy cost technology companies more than 50 billion dollars around the world last year, with Asia accounting for the largest share of losses, an industry report said Tuesday.

Software piracy cost technology companies more than 50 billion dollars around the world last year, with Asia accounting for the largest share of losses, an industry report said Tuesday.

Despite successes in the fight to protect intellectual property rights, on average 43 percent of software used in computers worldwide in 2009 was pirate, from 41 percent the year prior, the Business Software Alliance (BSA) said.

Worldwide, piracy losses reached 51.4 billion dollars in 2009, with 16.5 billion dollars of this in the Asia-Pacific, the annual report found.

The deluge of counterfeits was largely due to the growth of the personal computer market in Brazil, India and China, the group, which has a base in Singapore, said.

However, last year's losses worldwide were three percent down from 2008 while the rate of pirated software use fell in 54 economies, remained steady in 38 and rose in 19.

The average piracy rate in Asia-Pacific was 59 percent, which means that of the more than 900 million units installed last year, more than 530 million were unlicensed, said Victor Lim, a vice president at IDC, which carried out the study with the software alliance.

Bangladesh had the highest software piracy rate in Asia, followed by Sri Lanka, Indonesia and Vietnam, with China and India also among the most prominent culprits.

"This study makes clear that while efforts to bring down piracy levels in the Asia-Pacific are enjoying some success, dollar losses at over 16.5 billion (dollars) remain the highest in the world," said Jeffrey Hardee, BSA's vice president and regional director.

"This is unacceptable and there is still much to be done to engage governments, businesses and consumers on the risks and impact of software piracy."

The BSA said that for every 100 dollars of legitimate software sales in 2009, another 75 dollars-worth of unlicensed programmes were sold.

Ex-Soviet state Georgia was the world's top pirate user, with 95 percent of all software deemed illegal.

The United States had the lowest piracy rate with 20 percent, followed by Japan (21 percent), Luxembourg (21 percent), New Zealand (22 percent) and Australia (25 percent).

Singapore was the only Southeast Asian economy in the report's list of the 30 economies with the lowest piracy rates.

Hardee said that apart from global technology giants, small and medium firms, including those in Asia are being affected by software theft as it prevents them from growing domestically and expanding overseas.

He said at a media briefing that a 10-percentage point reduction in the software piracy rate over four years in Asia-Pacific would "directly contribute" 41 billion dollars to the region's economies.

It will also create 435,000 jobs, generate another 5.4 billion dollars in taxes and increase revenues to local vendors by 33 billion dollars.

"There is a compelling case here for governments to bring down piracy levels," Hardee said.

In an interview with AFP after the briefing, Hardee said companies using bootleg computer programmes, rather than individuals, were inflicting the heaviest damage.

"Surprisingly, quite a few listed companies are caught using pirated software. They just have unsophisticated or no software management policies in place," he said. "It's quite shocking."

Although software piracy refuses to go down globally and even continues to thrive in the rest of Asia, efforts by China and India to fight their computer users' desire for using stolen software are yielding positive results ...

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User comments : 7

The solution, while seeming counterintuitive, would work, and that is to sell the software for reasonable prices and not the high customer-gouging prices that force so many potential customers to look for cheaper alternatives. Make a lesser profit on many more sales and you'll get more than by trying to gouge customers on fewer sales. Fact is, a copy of a $500 software program costs pennies to make, so why keep charging $500 for it? Charging too much for products stifles economic growth as well.

Another way of looking at this is that $50 bln was saved by customers who didn't spend it on overpriced software!

The SW manufacturers already charge a premium to the rest of us to compensate for piracy loss so, the proposed cure is really meaningless! Any reduction in piracy rate would only mean an increase in SW profits w/ none of the hypothetical benefits.

The SW manufacturers already charge a premium to the rest of us to compensate for piracy loss so, the proposed cure is really meaningless! Any reduction in piracy rate would only mean an increase in SW profits w/ none of the hypothetical benefits.

frajo is correct.

Stealing copyrighted material is theft.If people want SW, games, music to be created, then they will have to pay for it and it is the job of the government to protect property rights.The alternative is no products.

Stealing copyrighted material is theft.If people want SW, games, music to be created, then they will have to pay for it and it is the job of the government to protect property rights.The alternative is no products.

There's no such thing as software theft (unless a robber snatches your installation disk and runs off with it). The problem here is piracy and piracy is NOT theft, the whole piracy = theft thing is just misinformation spread by those who possess the resources to do so.

Theft = the owner loses his propertypiracy = a shameless individual makes a copy of someone elses property BUT BY NO MEANS STEALS IT.

Also the major piracy happens in 3rd world countries, where income is much lower. How many of these pirates would infact, buy a $500 text/spreadsheet editor? Piracy allows expensive software to become industry standards, no piracy means open source will be used a lot more.

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